India Bullion: Gold up on short-covering, weak dollar, ETF inflows

Informist, Monday, May 8, 2023


By Sandeep Sinha


MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and COMEX today because of short-covering, a fall in the dollar, and rise in inflows in gold exchange-traded funds.


The precious metal fell sharply on Friday on a better-than-expected US nonfarm payrolls report. US employers added 253,000 jobs in April, higher than analysts' expectation of 181,000 jobs.


Gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 3.47 tn to 931.77 tn. The fund has a market value of $59.92 bln.


The dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 101.19 on reduced haven appeal.


"Investors await US consumer price inflation data due on Wednesday, which may impact the Fed's monetary policy stance. Traders also kept a tab on the developments surrounding the US banking sector and US debt ceiling," said Sriram Iyer, senior research analyst at Reliance Securities.


"Gold is expected to consolidate its recent gains; dip buyers are likely to support the metal. Overall, gold is expected to trade with a positive bias on banking concerns in near-term," Praveen Singh, associate vice-president, fundamental currencies and commodities at Sharekhan by BNP Paribas.


The spot gold-silver ratio, also known as Mint Ratio, was up at 78.99 to 1, which indicates that gold has outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold.


MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was up 68 points, or 0.4% at 16635 as of 1820 IST.
As at 1820 IST, the June and August gold contracts recorded turnovers of 15.55 bln rupees and 710.91 mln rupees, respectively. At the same time, the July and September silver contracts clocked a turnover of 10.68 bln rupees and 387.47 mln rupees, respectively.
 * At 1820 IST, the most-active contracts of bullion were:
 –June gold was up 0.6% at 60,992 rupees per 10 gm on MCX
 –June gold was up 0.5% at $2,024.10 an ounce on COMEX
 –July silver was up 0.3% at 77,349 rupees per kg on MCX
 –-July silver was up 0.1% at $25.94 an ounce on COMEX
 * Outlook for the rest of the session:
 –MCX gold seen at 60,520–61,350 rupees per 10 gm
 –COMEX gold seen at $2,000–$2,045 an ounce
 –MCX silver seen at 76,200-77,850 rupees per kg
 –COMEX silver seen at $25.22-$25.95 an ounce




US$1 = 81.79 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Aditya Sakorkar


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